SHELTER Scotland, the housing and homelessness charity, today welcomed the launch of the FSA’s Mortgage Market Review, which could see stronger checks on a customer’s financial situation, a clamp down on self-certification, and regulation of second charge lending and buy to let loans.

But he warned: “The recovery some lenders want, a return to high-risk 95 per cent loans, is not the recovery we need. The FSA must implement these solutions urgently to ensure the dark days of reckless lending never return.

“Every day, Shelter Scotland’s advisers see the misery of homeowners who have fallen into arrears or are being repossessed because lenders have handed out mortgages they couldn’t afford.

“When people overstretch themselves to the brink, an unforeseen bill or emergency can easily tip the balance of being able to afford a mortgage or not.”

Mr Brown added: “The first-time buyer market is vital to getting the economy moving again, but there is no sense in giving a mortgage to someone who cannot afford it. This must also include people who self-certify as well as first-time buyers.

“As one of the key providers of arrears and repossessions advice in Scotland, we have a duty to protect consumers, and we have tirelessly campaigned for these regulations. Now the FSA has accepted the need for tougher action, it must drive the changes through as soon as possible.”

Shelter Scotland also welcomed the proposal to regulate buy to let mortgages, and ensure these new landlords act responsibly towards their tenants.

Mr Brown said: “We have seen many buy to let landlords borrow excessively, believing they’ll make quick profits. But when these amateur landlords hit financial difficulties, it’s their innocent tenants who face eviction and homelessness.”